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The World Trade Organisation (WTO) has ruled against the US in an online gambling dispute with the Caribbean island of Antigua and Barbuda. The US is breaking international trade rules, it is expected to say.

Though the ruling is still private, Reuters has reported that the WTO has found the US guilty of not complying with a 2005 order in the case.

Antigua and Barbuda has built up a significant internet gambling industry to replace falling tourist revenue and took the US to the WTO over entry to the US gaming market.

Laws passed previously banned non-US companies from operating in the US gaming market. Antigua argued that this was an illegal trade restriction and broke a free trade pact that the US had signed.

A WTO dispute resolution panel found in Antigua's favour in 2003. The US appealed but the Appeals Board found largely for Antigua in 2005. The WTO has now found that the US has not tried hard enough to stick to that decision.

Antigua had taken a case relating to a ban on all bets placed across state lines. The WTO, though, only ruled in its favour in relation to the narrower issue of horse race betting across state lines. It found that foreign bookmakers seemed to suffer discrimination.

The WTO has provided both sides with a preliminary report on its findings. Both parties can submit further comments to it before a final report is published in March.

A spokesperson for the US Trade Representative told Reuters that the ruling was only a minor issue. "[We] did not agree with the United States that we had taken the necessary steps to comply with that ruling," she said. "The panel's findings issued today involve a narrow issue of federal law."

Since the disputed laws were passed in the US further, more stringent anti-online gambling legislation has been passed. Last autumn, the US passed laws which made almost all internet gambling illegal in the US and several online gambling executives have been held by US authorities.

The US has the opportunity to appeal the latest ruling after it is published in March.